Over the last 12 months, one particular strand of our work with patients with Generalized Anxiety Disorder (GAD) and Generalized Social Phobia (GSP) stands out. Pathological worry is the defining feature of GAD in DSM. Understanding the neural dysfunction underlying worry in GAD therefore likely represents an important treatment target. However very little is known about the neural underpinnings of worry or how they may malfunction in patients with GAD complicating treatment progress. More is known about a construct that may be viewed as a counterpoint to worry: optimistic bias (OB). OB is shown by most healthy individuals and involves thinking that compared to the average individual they are less likely to experience negative life events, but more likely to experience positive life events. However, in previous behavioral work we have found that GAD is associated with a reduced OB (i.e., realistic view) about the future. Specifically when we asked participants to indicate how likely they thought they were to experience something positive (e.g., having a great haircut; winning the lottery) or negative (e.g., having a bad haircut; having a heart attack) compared to the average individual, patients with GAD were much less likely to be optimistic. One goal this year was to determine the neural basis of this cognitive impairment in GAD using fMRI and to determine whether such impairment is specific to GAD and not GSP. In line with previous work, healthy participants showed significant OB; they considered themselves significantly less likely to experience future negative but significantly more likely to experience future positive events relative to others. This was also seen in GSP. However, GAD patients showed no significant OB. At the neural level, OB was associated with significantly greater modulation of medial prefrontal cortex (rmPFC) in the healthy and GSP groups compared to the GAD group. The GAD group also differed from the two other groups by showing increased neural responses to low impact (e.g., having a bad haircut) relative to high impact (e.g., having a heart attack) events. This neural dysfunction, particularly within mPFC, in patients with GAD may represent the neural substrate that underlies the reduced optimism and increased worry about everyday events in this population. Further and importantly, patients with GSP did not show such dysfunction, suggesting disorder-specificity and the possibility it could represent an important biomarker for treatment of GAD.